The Hindu Business Line : Sensex gains 136 on FII buying, tax sops

EQUITIES bounced back on Wednesday regaining a part of the losses suffered over the last four trading sessions. The benchmark BSE Sensex ended the day with a gain of 136 points.

Hectic buying by some FIIs in index heavy weights also aided to bullish sentiment. The Finance Minister's decision to extend long term capital gains tax on equities for three years was taken well by the market players and this brought interest in several mid-cap stocks.

However, the volatility in the market continued. After moving in a range of nearly 200 points, BSE Sensex ended with a gain of 135.78 points (2.42 per cent), to end at 5,756.76. On NSE, S&P CNX Nifty gained 53.2 points (3.01 per cent) to close at 1822.20. Sensex had lost 375 points in the previous four trading sessions.

Brokers said in the last few trading sessions several stocks had fallen sharply despite good results and this brought value buying both in the index and other stocks. "Several stocks have fallen between 25-40 per cent in the last couple of weeks and they have again turned attractive," said a dealer with a domestic broking firm.

Stocks had declined sharply on Tuesday after the Finance Minister presented an interim Budget, which had nothing significantly adverse for the market.

Brokers said tax sops to shipping and power and the quarterly performance of the corporate sector have encouraged investors to make fresh purchases at the lower levels.

However, most of the players are still not very optimistic about the market in the short term in the absence of any major announcement.

"With election round the corner, and most corporates having announced quarterly results, there are hardly any positives signals for the market," said a broker.

He said the market is likely to move in a narrow range for the week and movement is likely to be stock specific rather than event specific. Brokers said valuation of stocks has become more attractive as they were a quarter ago.

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